How the 2025 Spring Statement Could Affect Your Money

A Simple Guide to What the Budget Means for You

The Chancellor’s Spring Statement might sound like a lot of political jargon, but it can actually have a big impact on your wallet, your job, and your everyday life. Here’s a straightforward look at the key changes and what they could mean for you.

1. Changes to Benefits and Universal Credit

If you receive benefits, there are some major changes ahead:

• Cuts to Personal Independence Payments (PIP): Stricter eligibility rules mean around 370,000 people could lose PIP completely, while others may see reduced support. On average, those affected could lose up to £4,500 a year.
• Universal Credit Boost: The good news is that Universal Credit payments are set to increase from April. By 2029-30, about 3.8 million people are expected to be £420 a year better off, even when inflation is taken into account.
• But Not Everyone Benefits: Overall, around 3.2 million families are expected to lose out due to the wider benefit reforms, facing average losses of £1,720 a year by the end of the decade.
• Frozen Allowances: Some increases that were promised—like the rise to £107 a week for single Universal Credit claimants over 25—have been scaled back to £106. The health element of Universal Credit will also be frozen at £97 a week until 2030 for existing claimants.

2. Living Costs Are Going Up

Get ready to feel the pinch:

• Higher Bills from April: Your water, energy, and Council Tax bills will all rise starting 1 April.
• Minimum Wage Rise: If you’re over 21 and on the minimum wage, your pay will rise to £12.21 an hour, up from £11.44.
• Inflation on the Rise: The government expects inflation to average 3.2% this year before it gradually falls to the 2% target by 2027. This means everyday prices are set to rise faster than expected.
• Interest Rates Stay High: Because inflation remains high, interest rates are likely to stay higher for longer, making loans and mortgages more expensive.
• Slight Improvement in Living Standards: Real disposable income is expected to rise by just over 2% by 2030, which means the average person could be £500 better off annually—but that’s not a huge leap by historical standards.

3. Jobs and Public Services

The economy’s growth forecast has been cut in half for 2025, but there’s some positive news ahead:

• Government Spending Review in June will decide how much funding each department gets. This could lead to job cuts or reduced local services, such as bin collections or parking.
• New Jobs Through Investment: On the plus side, new government projects—especially in defence and housing—could create jobs in the coming years.

Final Thoughts

The 2025 Spring Statement brings a mix of gains and losses. Whether you benefit or lose out will depend on your personal circumstances. Keep an eye out for updates and prepare for changes to your income, bills, and local services.

Source: (BBC.co.uk)